Gang of Four (and Possibly Five) Apple, Google, Facebook, Amazon – and PayPal: Positioning for Payments in the New Mobile-Social Technology Era
Javelin Strategy & Research, March 2012, Pages: 43
We are at the beginning of a new technology cycle as consumer adoption of mobile and social media extends the reach of the web and integrates those media into the physical world. Facebook is only eight years old, and yet its planned $5 billion IPO is the largest Internet IPO ever. As in every new technology cycle, network effects make room for new players and the creation—and destruction—of vast amounts of wealth. The Gang of Four—Apple, Amazon, Facebook, and Google—is a group of network players entering the banking and payments environment. How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers? Surprisingly, PayPal rates on equal footing with the Gang of Four when it comes to innovation and emerges as a possible leader in the next tech cycle. This report will focus on the relationship of brands to consumer perceptions of trust, innovation, and privacy in order to identify opportunities and threats.
Primary Questions
- What is the newest technology cycle? Which brands are positioned to take advantage of the next cycle?
- What models are developing that will intersect with the financial services space?
- How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers?
- How well do consumers trust the Gang of Four compared with the major financial institution, payment network, and wireless carrier brands when it comes to their financial information?
- How do consumers rate the Gang of Four compared with the major financial institution, payment network and wireless carrier brands when it comes to protecting their private information?
- Which brands are viewed as most innovative?
- How do customers of the primary financial institutions rate their own institutions on the issues of trust, innovation, and privacy?
- How should brands position themselves to best compete in the new technology cycle?
Methodology
This report is based mainly on data collected online from a random-sample bank benchmark panel of 5,878 consumers in December 2011. The survey targeted respondents based on proportions of gender, ethnicity, age, and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.28% at the 95% confidence level.
It is also based on a survey of 5,211 consumers conducted online in October 2011 on KnowledgePanel®. This sample is representative of the U.S. census demographics distribution and is recruited from the Knowledge Networks panel. Data is weighted using 18+ U.S. Population Benchmarks for age, gender, race/ethnicity, education, census region, and metropolitan status from the September 2011 Current Population Survey (CPS) and household Internet access from the October 2010 CPS Supplement. The margin of sampling error is ±1.73% at the 95% confidence level.
Overview
Methodology
Executive Summary
Platforms That Are Able to Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each
Technology Cycle
Mobile + Social Defines the Newest Technology Cycle
Wealth Is Created—and Destroyed—During Each New Technology Cycle
Apple, Amazon, Google, and Facebook
Platforms That Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each Technology Cycle
Mobile Platform
Two Diverging Views of Mobile Success—Open (Google) vs Protected (Apple)
Social Media Platform
Mobile-Social Integration Opens Opportunity for Competitor to Move on Facebook
Game-Changing Business Models Rapidly Emerge During Times of Technological Upheaval
Tablets
Alliances Can Use Mutual Strengths and Weaknesses Can Fill Gaps to Respond Faster and with Better Products
Javelin TIP Model for Mobile Wallets
Trust
Apple Leads in Innovation—at Least for Now
Innovation
Privacy
Don’t Count out the Financial Institution’s Primary Relationship with the Consumer
No Brand Reaches the Gold Zone—Without an Alliance
Appendix
Related Research
Companies Mentioned
Table of Figures
Figure 1: Technology Cycles
Figure 2: US Adults’ Adoption of Internet, Social Media, Smartphones, 2007-2011
Figure 3: Apple, Google, Facebook, and Amazon Annual Revenues, 2007-2011
Figure 4: Gang of Four Selected Financial Data
Figure 5: Technology Crossover of Smartphones vs Non-Smartphones
Figure 6: US Consumers Mobile Operating Systems Marketshare
Figure 7: Last Accessed Social Media Through Computer, Laptop, Mobile Phone, Smartphone, or Tablet
Figure 8: Leading Social Networking Sites Based on Visits in the Previous Week
Figure 9: Consumer Mobile Phone Features Used: Accessing Social Networks
Figure 10: US Mobile Phone Owners Using Tablets, 2011–2016 Forecast
Figure 11: Consumers’ Mobile Phone Purchases, 2009-2011
Figure 12: High Trust—High Innovation—High Privacy
Figure 13: Brands Surveyed
Figure 14: Consumer Security Ratings of Brand Most Trusted with Financial Information
Figure 15: Consumer Ratings of Most Innovative Company
Figure 16: Consumer Ratings of Brand Best at Protecting Private Information
Figure 17: Most Trusted Brand for Financial Information by Consumer’s Primary Bank Relationship
Figure 18: Ranked Best at Privacy by Consumer’s Primary Bank Relationship (among Top 5 Banks, Top 5 Payment
Networks, Top 3 Wireless Carriers, and “Gang of Four”)
Figure 19: Most Innovative Company by Consumer’s Primary Bank Relationship (among Top 5 Banks, Top 5 Payment
Networks, Top 3 Wireless Carriers, and “Gang of Four”)
Figure 20: Innovation, Privacy, and Trust Grid
Figure 21: US Retail E-Commerce Transaction Dollar Volume and Share of Purchases Made Online, 2000–2011
Figure 22: Leading Social Networking Sites Based on Visits in the Past 30 Days (by Generation)
Figure 23: Consumer Likelihood to “Friend” a Company
Figure 24: Likelihood to Interact With Primary FI Through Social Media (by Activity)
Figure 25: Consumers’ Concerns with Mobile Banking, 2009-2011
Figure 26: Information Available on Social Network Profiles by Privacy Setting, 2011
Figure 27: Last Time Consumers Made a Purchase Using a Mobile Device
- Amazon
- American Express
- Apple
- AT&T
- Bank of America
- Chase
- Citibank
- Discover
- Facebook
- Google
- MasterCard
- Microsoft
- PayPal
- Research In Motion
- Sprint
- Twitter
- U.S. Bank
- Verizon
- Visa
- Wells Fargo
- zvelo
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